What is an Outlet Store?

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  • Written By: wiseGEEK Writer
  • Edited By: O. Wallace
  • Last Modified Date: 09 October 2019
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An outlet store is a store where a cost savings is conferred to the customer because the product isn't sold through a third party. The store is owned by the manufacturer of these retail products, and are familiar to many, often located slightly out of town where rents are cheaper, and grouped together with a variety of other outlet stores into what is called an outlet mall. For bargain hunters, the outlet store may be a great way to get savings on well-known brands, though shoppers should know that the highest brand quality isn’t always represented at the outlet.

For a manufacturer, having an outlet store can be a great way to accomplish several things. The store can sell any irregular stock that has minor flaws, which wouldn’t normally be acceptable to buyers shopping at other high quality department stores. Sometimes there are large outlet department stores that buy irregular items or off-season items from manufacturers. These are also worthy places to visit for the bargain hunter, though stock and quality of stock isn’t always dependable.

In addition to making a profit on irregular stock, an outlet store could also sell off-season stock or older stock that would no longer be acceptable in other department stores because it might be outmoded. The manufacturer can still make a profit on products that would normally either be discarded or written off as a loss, because people are enticed by getting the manufacturer’s brand name at a reduced cost.


Due to the popularity of the outlet store, many companies now add a third practice to increase profitability. They produce less expensive items that are lower in quality than would ordinarily be offered under their brand names and they sell these at outlet stores. This is where the bargain hunter really should be careful.

A label doesn’t necessarily imply the quality ordinarily associated with the brand. Some manufacturers principally only stock their stores with less expensive merchandise that isn’t representative of their usual quality, but they charge more for it because it still has the brand label. Shoppers have to observe this practice and determine if a price asked at an outlet store is really in line with the quality of the item being purchased. There are many websites devoted to shopping that discuss this practice.

The original outlet stores were often located near the factories where clothing or other items were made, but since many manufacturers have merchandise assembled in other countries, this strategy isn’t realistic for most bricks and mortar stores. One savings though, is to create an outlet store on the Internet that doesn’t have a physical shopping location. Many known manufacturers have online outlets where people may find additional savings, and because there’s no need to staff these “online” stores in the same way an offline establishment is staffed, discounts may be steeper.


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